Our team can assist any individual, local or foreign, who wishes to open a trust in the UK. A trust allows the founders to choose the way in which their assets will be managed. Oftentimes, the assets are money, but they can also include land or buildings. Moreover, depending on their purposes, those who set up an asset protection trust in the UK can establish personalized ways in which their assets are protected against risks and liabilities.
The numerous types of trusts in the UK allow founders to pick the proper one that suits their needs. The bare trust in the UK or the UK family trust are just two examples, about which you can read more below.
Our lawyer in England can answer detailed questions about trusts, including those referring to the cost of setting up a trust in the UK. Please read below to find out more about the trusts in the UK and reach out when you require assistance for their setup.
Table of Contents
The basic steps for setting up a trust in the UK
The presence of the following parties is mandatory to open a trust in the UK:
- The settlor: This is the person who sets up the trust and provides the assets (money, land, buildings or even investments);
- The trustee: The party who is entrusted with the management of the assets;
- The beneficiary: The one who will benefit from the assets placed in the trust.
The main types of trusts in the UK are the following:
- bare trust;
- family trust;
- discretionary trust;
- lifetime trust;
- charitable trust;
- revocable trust.
Each type of UK trust has certain characteristics and can be subject to different requirements, most notably related to taxation (see below for more details). Our lawyer in London can assist settlors who wish to know more about the setup. Upon request, we also offer details on how to terminate trusts, for example, on dissolving a discretionary trust in the UK.
UK trust registration requirements
Trusts are registered with the HM Revenue and Customs when the said trust is liable for taxation or according to its type.
Trusts that are not liable to taxation are still registered when they have the following form:
- They are UK express trusts (unless specifically excluded);
- They are non-UK express trusts (for example, those trusts that are used to purchase property or land in the UK);
- They are non-UK express trusts in which at least one trustee is a UK resident who has entered into a business relationship with the UK. Our lawyer in the UK can give you more details about this situation.
Given the different situations for registration, we recommend getting in touch with our local team of specialists, especially when setting up a living trust, charitable or a revocable trust in the UK.
Trust taxation in the UK
Trusts are mostly exempt from income tax up to a certain amount. At the same time, trustees do not enjoy the dividend allowance. The trustee is also the one to fill in the trust and estate tax return. The beneficiary may, in come cases, claim back part of the income tax.
Our lawyer in England lists some of the taxes that apply to a trust in the UK:
- The tax rate on dividends in the case of discretionary trusts in the UK is 39.35%;
- The tax rate for all other types of income in the case of discretionary trusts is 45%;
- The income tax rate for dividend type income in the case of possession trusts is 8.75%;
- The income tax rate for all other incomes in the case of possession trusts is 20%;
- A bare trust in the UK is subject to a £500 tax-free limit.
Our team can give you more details about trust taxation in the UK upon request.
In addition to our services related to the creation of trusts in the United Kingdom, we can also help investors who want to set up a company in the UK.
Contact our lawyer in the UK if you are interested in setting up a trust in the UK.
